Energy and Economy in North Korea (PowerPoint)

							DPRK‘s Strive for Energy
Security & Independence
       ―Will there ever be
       a breakthrough?‖


 June 4, 2008
 Visiting Scholar, APARC, Stanford University
 Joon-Young Chung
Outline
1. Introduction - Current Status & Conditions

2. Main Reasons behind the Energy Crisis in DPRK

3. DPRK‘s Internal Energy Policy: A Proven Failure

4. DPRK‘s External Energy Policy

5. Conclusion & Outlook
1. Current Status : Korean Peninsula
at Night, North Korea is Dark
The Country Filled with Bald
Mountains – Rural Areas
People Carry Firewood :
Gaesung Province
Charcoal Briquettes being loaded
for Shipment
Plowing a Field with Cattle
Power Plant Construction by Hand
  2. Main Reasons behind the Energy
  Crisis in DPRK
 Characterized by a Policy of Self-Reliance & a
  completely Closed Economic System
   •   High dependence on domestic energy resources
          —Hydro and Coal
 Sharp Decline of Coal Output during Mid 1980‘s
   •   Stagnation of new mine developments
   •   Existing mines are exhausted & coal mines invite floods
 Experiencing Significant Oil Shortage
 Deepening Electric Power Crisis
   •   Outdated power plants
   •   Fuel deficiency in thermal power plants
3. DPRK‘s Internal Energy Policy
Encourage Energy Saving & Increase Coal Production

 Maintenance of Existing Hydro & Thermal
  Plants
 Construction of Large Hydro Power Plants
 Encouraged to Build Medium & Small Sized
  Hydro Power Plants(100~1,000kW)
 Increase the Production of Coal
 Nuclear Energy Research & Development
4. DPRK‘s External Energy Policy
Expression of NK Intention to have Energy Assistance


 North-South Korean Relations

  • Ask for Energy Aid
  • Demanded 2,000MW power (Dec 2000 Minister-
    level conference talk, 500MW as a start)

  • ROK offered to send 2,000MW to DPRK directly
    - Act as a reopening of 4th Six-party Talks
    - $10 billion burden for South Korea
4. DPRK‘s External Energy Policy
Expression of NK Intention to have Energy Assistance


  1st Nuclear Crisis(US-DPRK Negotiation)

    • US-DPRK Agreed Framework(1994. Geneva)
    • Freezing in return for LWR (1,000MW x 2)
    • KEDO : Suspended Construction of 2 LWRs
      (Nov ‘03)
4. DPRK‘s External Energy Policy
Expression of NK Intention to have Energy Assistance

 2nd Nuclear Crisis (Six-Party Talks)
  • LWR Request. Agreed to discuss at an appropriate
    time (Sep 19 Joint Statement ‗05)
  • 1st Phase : Shutdown nuclear facilities—Exchange
    for 50,000 tons of HFO (Feb 13 Agreement ‗07)
  • 2nd Phase : Disable nuclear programs—In exchange
    for 950,000 tons of HFO
  • 3rd Phase : Will request restarting the LWRs project
    at upcoming timetable for an anticipated next six-
    party talks—In exchange for complete distmantling
    nuclear facilities and program
4. DPRK‘s External Energy Policy
Expression of NK Intention to have Energy Assistance


 Northeast Asia Energy Cooperation

   • Intergovernmental Collaborative Mechanism in
     NEA (ROK-DPRK-Russia-Mongolia, UN ESCAP
     Supported)
   • The Greater Tumen Initiative (ROK-DPRK-
     China-Russia-Mongolia, UNDP Supported)
   • NK‘s nuclear issues—Obstacle to further
     negotiations : Entry-level discussion
5. Conclusion & Energy Outlook

 Could the North Korean Solve Energy Crisis?
  • Limitation : Money & Technology, Need external
    support
 Compensatory Energy Assistance (6-Party
  Talks)
  • Expect Political war over ―LWRs‖ in Next Talks
     - Negative view in US
     - Many issues including time for provision
  • Possible of Revival of the KEDO LWRs
  5. Conclusion & Energy Outlook

 ROK‘s Proposal to Send 2,000MW to DPRK
  • Uncertainty Exists whether to Accept the Proposal
  • Change of Conditions since Sep 19 ‗05 Statement
  • If Accepted by DPRK, ROK need to re-adjust
    depending on the Progress reached through Six-
    Party Talks
  • Idea is to Build Energy Infrastructure before
    Unification
  • Possible Far East Power Grid Interconnection(S-N-
    Russia)
  5. Conclusion & Energy Outlook

 Northeast Asia Energy Cooperation
  • Advance Progress in Nuke Dismantling, thus
    Creating a Positive Environment
  • Prevention of Duplicate Investment, further Energy
    Cooperation ; must build through Six-Party Talks &
    Bilateral Relationship
THANK
 YOU!